India’s e-commerce penetration may double, become $99 bn market by 2024: Goldman Sachs

The report states that the growth rate for India’s e-commerce industry, for each of the next 4 years, would overtake that of developed economies like the US, UK, China.
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India’s e-commerce penetration is expected to more than double to nearly 11% by 2024 from 4.7% in 2019, and the industry is likely to reach $99 billion in size. This is according to Goldman Sach’s review of global e-commerce markets. 

The brokerage firm’s report 'Global Internet: e-commerce's steepening curve’ states that the rate of growth for the e-commerce industry in India, for each of the next four years, would overtake that of developed economies like the US, UK, China, Europe and Brazil. 

"We forecast India e-commerce will reach $99 billion by 2024, growing at a 27 per cent CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth in our view," the report said.

While the e-commerce growth rate for the current year is expected to be 18%, estimates suggest growth rates of over 33% and 28% respectively in 2021 and 2022 respectively. 

Online grocery is expected to be the biggest growth driver for e-commerce in India and is projected to reach $29 billion in size over five years from below $2 billion at present. 

“The category has been growing at more than 50% year-on-year for the last couple of years, but with the outbreak of COVID-19 resulting in a shift to online, and the recent entry of RIL, we believe growth will accelerate to 81% annual growth rate for the period of 2019-2024,” analysts at Goldman Sachs said

Smartphones, electronics and large appliances have comparatively higher online penetration, the report states, adding that there is sufficient room for growth in categories like apparel, health & personal care, in relation to countries like China. 

Reliance Industries Ltd’s (RIL) e-commerce offering JioMart, plans to leverage Facebook’s WhatsApp to link local convenience stores with customers. 

While Bigbasket and Grofers accounted for more than 80% of the market in 2019 in online grocery, the report suggests that RIL through its partnership with Facebook could become a market leader in the online grocery space, with 50% market share by 2024. 

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